Industry Voices—Why insurers will need to keep up with Amazon and Google to succeed in Medicare Advantage

a senior woman sitting on a couch using a tablet
If legacy players hope to capture a portion of the growth in Medicare Advantage, they’ll have to move fast to embrace data-based strategies and build modern, digital customer experiences. (goodluz/Shutterstock)

Judging by some bold actions of tech giants and the incredible growth of Medicare Advantage (MA), we may look back on 2019 as the year before the great healthcare disruption.

Heading into 2020, traditional health insurers are on high alert—as they should be.

Last year saw Amazon and Google take their first serious steps toward building offerings designed to improve health outcomes, largely by delivering a superior customer experience that provides better outcomes at lower cost. Meanwhile, payers aggressively piled into MA, making it the fastest-growing market in health insurance.

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All of this will carry into 2020 with perhaps even greater ramifications for the health insurance industry.

RELATED: Humana posts $512M in Q4 profit on the back of Medicare Advantage growth

MA enrollment will increase—competition will, too, as insurers roll out more and more MA plans.

Simultaneously, tech behemoths will continue their work on, and perhaps even unveil, healthcare offerings that embody what those companies do best: use massive amounts of data to deliver intuitive, digital customer experiences and crowd-pleasing results.

A new generation of MA consumers

MA plans covered more than 22 million Americans in 2019, more than twice as many as a decade ago. By 2035, they’re projected to cover 80 million. If legacy players hope to capture a portion of that growth while protecting against digital disruption from Amazon and others, they’ll have to move fast to embrace data-based strategies and build modern, digital customer experiences.

Providing those experiences is critical to fend off big tech and to meet the demands of the new generation of MA consumers. Each new wave of MA customers will be more tech-savvy, and, like younger consumers, they will demand self-service through websites and mobile apps, one-click transactions and easy, 24/7 access to information. Already, 40% of seniors own smartphones, and 82% of those who will soon age in to MA are regular internet users.

RELATED: Anthem's Medicare Advantage enrollment grew by 20% in 2019

Complicating the challenge, MA plan members are older and sicker than those in other commercial plans, putting more pressure on managing costs. And MA reimbursement is tied to regulatory compliance that, along with financial incentives to improve care, drives critical star ratings; jumping from a 3- to a 4-star rating can generate up to a 17% increase in revenue.

Three strategies for success

In a growing market with shifting consumer expectations and increased competition, insurers must create better, more modern member experiences to support high-touch, high-need members, all while managing the escalating costs of care. They must comply with a complex regulatory regime and improve outcomes to achieve and maintain star ratings that have a significant impact on enrollment and revenue.

It won’t be easy. But the plans that rise to those challenges will focus on three strategic fronts:

  1. Create a seamless online shopping experience. Plans should integrate data into centralized platforms and portals. That will enable them to deliver intuitive, single-screen interfaces to shoppers, members and their own customer service representatives. They should enable constant digital access to benefits information, introducing tools like provider searches and moving toward self-service technology such as chatbots.
  2. Streamline and personalize member communications. The most effective way to manage the costs of an aging member population is to use data to determine next-best actions—and then communicate those actions to members. But that only works if plans can eliminate the haphazard barrage of mail, email and phone messages that members often receive. Some members will respond to text messages, others to email and others to phone calls. Plans must identify the most effective means of communicating with each member and prioritize communications through those channels.
  3. Capture, track and analyze member data. When are members most likely to call customer service? What technical barriers prevent them from utilizing digital tools? What social determinants impact the risks and outcomes associated with individual members? The answers to these and many more questions lie in a plan’s member data. Most plans are burdened by disjointed and archaic technology that makes those answers inaccessible. Partnering with technology companies that can extract, organize and analyze those data offers the fastest route to unlocking vital intelligence.

Health plans—burdened by legacy technology, siloed systems and disorganized data—won’t be able to deliver on any of those strategies on their own. They’ll have to find outside partners that can build and deploy the technology to power superior member experiences.

The plans that identify and move on those partnerships quickly are most likely to seize the MA opportunity—before Silicon Valley snatches it away.

Mark Nathan is the founder and CEO of Zipari, a company that creates consumer-experience technology for the health insurance industry. Mark began his 25-year-plus career as a robotics engineer at NASA and spent half of his career leading the modernization of customer experience at Guardian. The other half of Mark’s career has been dedicated to developing enterprise-level, consumer-oriented technology for large consumer brands like Apple, Disney and ABCNews.com.

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